C & Ors v Australian Crime Commission
[2006] HCATrans 135
[2006] HCATrans 135
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S65 of 2006
B e t w e e n -
C
First Plaintiff
R
Second Plaintiff
D
Third Plaintiff
A
Fourth Plaintiff
M
Fifth Plaintiff
and
AUSTRALIAN CRIME COMMISSION
Defendant
Summons
GLEESON CJ
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON FRIDAY, 10 MARCH 2006, AT 12.23 PM
Copyright in the High Court of Australia
__________________
MR D. GRAHAM, QC: May it please your Honour, I appear with my learned friends, MR A.M. THOMAS and MR P. KULEVSKI, for the plaintiffs. (instructed by Cosoff Cudmore Knox)
MR S.P. DONAGHUE: May it please the Court, I appear for the defendant. (instructed by Australian Crime Commission)
MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth of Australia: May it please the Court, I appear for the Attorney‑General of the Commonwealth intervening for a very limited purpose. That is to inform the Court of one matter relating to 78B notices and for that purpose only. (instructed by Australian Government Solicitor)
HIS HONOUR: Yes, Mr Graham.
MR GRAHAM: If your Honour pleases. Could I seek a little guidance as to how much of this matter your Honour has been able to digest in the very short time that has been available?
HIS HONOUR: I have read the reasons for judgment of the Full Court of the Federal Court and I have read the affidavits, including an affidavit which refers to an undertaking not to pursue inquiries other than inquiries relating to Commonwealth offences or matters of possible Commonwealth offences, which taken at face value seems to suggest that the issue raised in the Full Court of the Federal Court would not arise. I have not yet identified from the papers what you say in the light of that undertaking is the constitutional issue that arises in these proceedings.
I have decided that the special leave application in matter No S63 of 2006, which is the application for special leave to appeal from the Full Court of the Federal Court, should be expedited and will be set down for hearing in Sydney on Friday, 19 May 2006.
MR GRAHAM: I am sure that will create no difficulty for the parties at all.
HIS HONOUR: I mention that because I see the Deputy Registrar in Court and I just decided that right now. Any necessary orders or directions that have to be made in order to have that special leave application ready for hearing on 19 May can be attended to and if there is any dispute about any of them, the matter can be listed before me in the meantime to resolve any problems that arise.
MR GRAHAM: Your Honour, before going to the point that your Honour has raised ‑ ‑ ‑
HIS HONOUR: That is all I know about this matter.
MR GRAHAM: I am very grateful to your Honour. There are some minor procedural matters that should be attended to in order to allow the plaintiffs to be referred to by their initial letters as assigned in the title to the action rather than by their full names. That is a power that your Honour has and no doubt it has been frequently exercised. There is an affidavit by Mr Rydon, a second affidavit, in which he exhibits complete copies of the two sets of summonses under the Australian Crime Commission Act issued to our clients wherein they are named.
HIS HONOUR: I do not think I have seen that. Where do I find that?
MR GRAHAM: There should be a second affidavit by David Peter Rydon.
HIS HONOUR: I see. This is the one ‑ ‑ ‑
MR GRAHAM: With two exhibits only to it.
HIS HONOUR: I have not had an opportunity to look at that.
MR GRAHAM: There is no need, your Honour, to look at it beyond what I have explained about it.
HIS HONOUR: This is an affidavit of David Peter Rydon of 9 March 2006.
MR GRAHAM: Yes.
HIS HONOUR: Is there any objection to that affidavit?
MR DONAGHUE: There is not, your Honour, no.
HIS HONOUR: I will read that affidavit to myself. Am I right in thinking that these summonses relate only to Commonwealth offences?
MR GRAHAM: No, your Honour, they relate to Commonwealth offences and State offences in both.
HIS HONOUR: Could you just show me that.
MR GRAHAM: If your Honour would go to ‑ ‑ ‑
HIS HONOUR: I have just looked at the very first summons which is on page 1 of the annexures to the affidavit.
MR GRAHAM: There may be an easier way of doing this, your Honour. If your Honour were to go to the statement of claim ‑ ‑ ‑
HIS HONOUR: Just sticking with the summonses for the moment.
MR GRAHAM: If your Honour pleases. It is just a little hard to find the actual page.
HIS HONOUR: I am just looking at the affidavit that I just mentioned and the very first annexure to the affidavit is a summons for one of your clients. As I say, I have not laid eyes on that summons before this minute but I see references to section 29D of the Crimes Act (Cth), sections 134 and 135 of the Criminal Code (Cth).
MR GRAHAM: Then if your Honour looks towards the end of paragraph (ii), the last few words, and paragraph (iii), the last few words. Each of the 10 summonses exhibited to Mr Rydon’s affidavit contains those words.
HIS HONOUR: Is there any need for me to look at any of the other summonses?
MR GRAHAM: No, your Honour, unless my learned friend suggests otherwise.
HIS HONOUR: While we are still dealing with evidentiary matters, are there other affidavits that have to be read?
MR GRAHAM: The only affidavits that we rely on are the affidavits of David Peter Rydon that your Honour has already read and there is the affidavit of James Edgar Duffy which was sworn yesterday on behalf of the defendant.
HIS HONOUR: Is there any objection to either of those affidavits?
MR GRAHAM: Not by us.
MR DONAGHUE: Nor by us, your Honour.
HIS HONOUR: Then I will read those affidavits.
MR GRAHAM: Your Honour has read them, yes. In a sense the question that your Honour posed to me makes an assumption which we would respectfully take issue with because it assumes that a summons may be partially good and partially bad insofar as it is supported in part by constitutional provisions which were not attacked in the Federal Court proceedings and insofar as the summons are supported by provisions which were attacked.
We say that the statement – it is perhaps going too far to say that it is an undertaking – that the examinations will not proceed into the challenged territory does not meet the point. We say if the summonses are bad, they are bad.
HIS HONOUR: What would meet the point would just be an issue of fresh summonses, which I suppose they could do this afternoon, leaving out the references to State offences.
MR GRAHAM: Part of our argument before the Full Federal Court was that the entirety of the section which defined – which was section 4 ‑ ‑ ‑
HIS HONOUR: My comment was actually probably directed more to your opponents than to you, Mr Graham. The point I was seeking to make was this. If so far as the ACC is concerned, at least for the time being presumably until resolution of the special leave application in the Federal Court matter, they do not intend to ask these people any questions about offences other than Commonwealth offences, why do they not just issue fresh summonses that delete any references to State offences, thereby withdrawing from you any argument that the summonses, at least in the respect that you just mentioned, are invalid because of the reference to State offences.
MR GRAHAM: Your Honour, perhaps one has to go up the scheme of the Act a little further. We say that the Act is attacked both in toto but more significantly, insofar as it contains the notion of a federal offence with – a State offence with a federal aspect. That flows on ‑ ‑ ‑
HIS HONOUR: Where do I most conveniently find the Act, Mr Graham?
MR GRAHAM: There is a folder of authorities from the respondent, your Honour, which contains it, in tab 1.
HIS HONOUR: What prompted my question to you was that I have read the reasons for judgment of the Full Court in which they identify the issue by reference to the State offences. Then, having read the affidavit of Mr Duffy and the undertaking, if that is what it is, or the intimation, it just occurred to me to ask of all the parties whether the practical problem facing us this afternoon could be resolved by the issue of fresh summonses deleting any reference to State offences. You say, as I understand it, that it could not. Why is that?
MR GRAHAM: We say, your Honour, firstly because our attack is on the whole Act. Further, our attack is on section 4A which defines, to use the word loosely, what is a State offence that has a federal aspect.
HIS HONOUR: Are there provisions of the Act that deal only with Commonwealth offences? How does the Act work in relation to Commonwealth offences? Just forget about State offences having a federal aspect at the moment.
MR GRAHAM: Your Honour, I think the shortest way of putting it is this. It works through the board of the ACC. If your Honour were to go to paragraph 7B of the Act which establishes the board and then to section 7C which sets out the functions of the board, and in particular 7C(1)(c), and then goes back to the definition section in section 4(1) ‑ ‑ ‑
HIS HONOUR: “[F]ederally relevant criminal activities”?
MR GRAHAM: Yes. That expression is defined as having two limbs.
HIS HONOUR: Are paragraphs (a) and (b) not severable?
MR GRAHAM: That would be an argument to be put against us, your Honour, but we would respectfully submit that is not a matter to be determined today.
HIS HONOUR: But it is not a matter that was considered by the Full Court of the Federal Court either, was it? In the short time I have had to read the reasons for judgment of the Full Court of the Federal Court, they seem to have directed their attention to paragraph (b) of the definition of “federally relevant criminal activity”.
MR GRAHAM: That is true, your Honour, I accept that. The next step that happened in both the Federal Court proceeding and the proceeding in this Court is that an attack is made upon the determination which was made by the board of the ACC which launched this investigation. The determination of the board was framed in terms which drew both upon the first limb of the definition of “federally relevant criminal activity” and the second. We would be seeking to contend that that determination framed as it was in that way is not severable and it is bad because it goes too far because the constitutional support of part of it is lacking.
HIS HONOUR: Are these points that you argued in the Federal Court?
MR GRAHAM: As to the determination, your Honour, yes.
HIS HONOUR: As to the way this legislation would operate in relation to what I will call federal criminal activity only?
MR GRAHAM: That was not explored, your Honour. It was touched on at the end of Justice Gyles’ judgment when he said that it was not necessary for him to explore the consequences of the view that he held in relation to the concept of a State offence with a federal aspect.
HIS HONOUR: I am trying to work out to what extent a decision on the application for special leave to appeal, if it is unfavourable to you, will put an end to this litigation.
MR GRAHAM: I should have thought it would because any fresh application that we made to challenge later summons, whether it was confined to federal offences or State offences, the first would have poor prospects of success if it was so confined. The second would fail because it would be seeking to reagitate a matter that had been disposed of by the Full Federal Court and this Court.
HIS HONOUR: Do I gather you to say that the explanation of the form of the summonses which include their reference to State offences is that they need to do that to conform to the determination of the board?
MR GRAHAM: I cannot say with certainty that they need to but they chose to. The summonses reflect what the determination is.
HIS HONOUR: What is puzzling me is why they could not just issue fresh summonses this afternoon deleting the reference to State offences. Presumably they reckon they have enough to go on with in inquiring into federal offences for the moment.
MR GRAHAM: Your Honour, I suppose that I am repeating myself, but the determination goes so much further than being confined to four federal offences or four federal acts.
HIS HONOUR: I will adjourn now until 2.00 pm. Maybe over the period of the adjournment the parties could consider the question that I have raised. As I say, there is this affidavit of Mr Duffy that says in effect, “For the moment we only want to ask questions about federal offences”. Subject to any question of inseverability, there might not seem to be any constitutional problem about inquiring into federal offences. I do not know what issues arise about the form of any determination, but if between now and 19 May, which is when the special leave application will be heard, the ACC has enough to go on with inquiring into Commonwealth offences, that might be a practical solution to the problem.
MR GRAHAM: One difficulty is that once the witness is before the examiner, there is nothing in the Act as I read it that confines the examiner to the four corners of the summons.
HIS HONOUR: I see. We can look at that after lunch.
MR BENNETT: Your Honour, what I need to say would take 60 seconds. May I have leave to deal with that now?
HIS HONOUR: Yes.
MR BENNETT: It is just this, your Honour, that in relation to section 78B notices, which, as I understand it, have not been given in this case, the Attorney‑General takes the view that they are required in special leave applications. That is a matter ‑ ‑ ‑
HIS HONOUR: This is not a special leave application.
MR BENNETT: No, I understand that, your Honour. There is one pending and hopefully this will not be the case in which that issue is decided. All I wish to say is this, that if that issue is to be raised, we would wish to be heard on it. In other words, if there is not – my only concern is that the Court would decide that it was unnecessary in a situation where we were not there to put the reasons why we submit it is necessary.
HIS HONOUR: There is nobody keeping you, there is nobody preventing you from staying, Mr Solicitor. You are welcome to be here all afternoon if you want to when the question of 78B notice will be raised. It is entirely a matter for you whether you go.
MR BENNETT: Your Honour, I was hoping it would not arise in this application in any event.
HIS HONOUR: I do not know. It is too early for me to say. I really do not know enough about the case to express any view about section 78B notices at the moment, but you are welcome to come or go as you please.
MR BENNETT: If the Court pleases.
HIS HONOUR: We will adjourn till 2 o’clock.
AT 12.42 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.00 PM:
HIS HONOUR: Yes, Mr Graham.
MR GRAHAM: May it please the Court. I meant to hand up at an earlier stage, your Honour, a chronology. I hand up two to the Court. My learned friend has one. The principal point of this document was to deal with two matters that do not seem to have arisen, at least not directly. One was to meet any suggestion of delay on our part but, more importantly, to meet any suggestion that today’s application was in some way a back door way of trying to achieve a stay pending an application for special leave to appeal to this Court, which we maintain most strenuously it is not because of the fact that fresh summonses were issued by the Commission which were not summonses which were the subject of the Federal Court proceedings. I do not understand my learned friend ‑ ‑ ‑
HIS HONOUR: Is there any difference between the summonses that have been issued and the summonses that were the subject of the Federal Court proceedings?
MR GRAHAM: No, your Honour, but the Federal Court would not have had jurisdiction to make an order in relation to the later summonses because the only matters which were before the Federal Court were challenges to the earlier summonses. They could not have been, as it were, roped into the Federal Court proceedings after the Full Federal Court had delivered its judgment.
HIS HONOUR: What was the point of the issue of the fresh summonses if they are in identical terms?
MR GRAHAM: You will have to ask my learned friend that, your Honour.
HIS HONOUR: I will in due course.
MR GRAHAM: All we can see that has happened is it has caused us massive inconvenience and taking up the time of the Court today. Could I turn to the matters that your Honour had raised with me just before lunch. I had indicated to your Honour that part of our case was not only an attack upon the ACC Act, or some provisions thereof, but also upon the determination of the ACC itself. Could I ask your Honour to look again at the folder which contains Mr Rydon’s second affidavit with two exhibits. I am reminded that some order needs to be made about this affidavit and its exhibits.
HIS HONOUR: You tell me the order you want me to make and read it onto the record.
MR GRAHAM: I would ask your Honour that an order be made that this affidavit and its exhibits not be disclosed to any person other than the parties except upon an order of a Justice of this Court.
HIS HONOUR: What do you say about that, Mr Donaghue?
MR DONAGHUE: I do not oppose that, your Honour.
HIS HONOUR: All right, I will make that order.
MR GRAHAM: If your Honour pleases. If your Honour goes to tab 1 of that document, my copy of tab 1 happily is numbered; I hope your Honour’s is as well in the top right‑hand corner.
HIS HONOUR: I just have to be sure I have the right affidavit. There are two affidavits of the same date, are there not?
MR GRAHAM: That is unfortunately so. One has just two exhibits and one has about 10.
HIS HONOUR: I am dealing with the one with two.
MR GRAHAM: That is one I asked for the suppression order about. If your Honour goes to tab 1, which is the first five summonses, to those summonses were attached a number of documents including the initial determination of the Crime Commission.
HIS HONOUR: Has there been more than one determination?
MR GRAHAM: There has been what might be called supplementary ones, your Honour, extending their time for report and extending the persons who may participate in the inquiry but not in any substantive way.
HIS HONOUR: What is the section under which these determinations are made?
MR GRAHAM: They are made under section 7C of the Australian Crime Commission Act, 7C(1)(c), and section 7C(3). Subsection (3) is concerned with the power that:
The Board may determine, in writing, that an investigation into matters relating to federally relevant criminal activity is a special investigation. Before doing so –
et cetera.
HIS HONOUR: Does that enliven some power?
MR GRAHAM: It enlivens two sets of powers, your Honour, powers under section 22 relating to search warrants and 24A and following relating to examinations. What happened in this case was that there was a determination that there be an investigation and that it be a special investigation.
HIS HONOUR: Who is the examiner?
MR GRAHAM: A man named Mr Sage.
HIS HONOUR: But an officer of the ACC?
MR GRAHAM: He is, your Honour, yes. In section 7 it is provided that:
The ACC consists of:
(a) the CEO; and
(b) the examiners; and
(c) the members of the staff of the ACC.
I was taking your Honour to tab 1 to Mr Rydon’s confidential affidavit, if I may now call it that. That sets out the determination of the Commission of 15 May 2003. The important passages in that document appear on page 22, lines 6 to 12. Your Honour has been taken to the definition of “federally relevant criminal activity”. If your Honour then turns over to page 23, there is a paragraph at line 10 which goes on and on and on and finishes on page 25, line 7.
There are two points perhaps to be made there. One is that offences against a law of a State with a federal aspect are part of the determination and the other unlawful activities are linked with those that have gone before which are what might in most cases be described as Commonwealth offences.
HIS HONOUR: This determination was made in May 2003. What does the evidence show as to what was going on between May 2003 and July 2005 when the first summons was issued?
MR GRAHAM: I do not believe that the evidence before this Court or the Federal Court would shed light on that. My learned junior, who is more familiar with this, confirms that. Whether there was much action or little action we do not know. We get a hint of something to this effect from Mr Duffy’s affidavit which I will say something about in a moment, but there is nothing else that could assist your Honour in that regard.
I had said to your Honour that the determination by the ACC was the subject of challenge in the Full Court of the Federal Court. By error, the document constituting the final form of the application to the Federal Court, which is in the papers already before your Honour, is not to be found but if I may ‑ ‑ ‑
HIS HONOUR: Is that challenge the subject of the decision that is the subject of the application for special leave to appeal?
MR GRAHAM: Yes, it is, your Honour.
HIS HONOUR: Just tell me then about the nature of those proceedings. That was a challenge to the validity of the determination, the validity of the statute, the entire statute?
MR GRAHAM: And alternatively to particular provisions, the ones that were specific to State offences having a federal aspect.
HIS HONOUR: And to the summonses?
MR GRAHAM: The summonses were challenged in toto.
HIS HONOUR: Apparently there was some kind of agreement between the parties that pending the resolution of the Federal Court proceedings your clients were not required to answer the summonses.
MR GRAHAM: That is correct, your Honour. There is some dispute as to whether that agreement went beyond the Federal Court but that need not trouble your Honour I think at this stage. May I hand that copy of what became the ultimate application which came on for consideration before the Full Court of the Federal Court. Its predecessor is to be found as an exhibit to Mr Rydon’s open affidavit, but I need not trouble your Honour with that.
HIS HONOUR: What is the declaration that Justice Gyles would have made?
MR GRAHAM: I think it is fair to say, your Honour, because of an indication that some matters had not been explored, he did not distinctly state what declarations he would have made. As I read one of the passages in his judgment, which I want to go to in a moment, he thought that some questions concerning either reading down or severability had not been fully explored, so he did not formulate an alternative set of declarations and orders.
HIS HONOUR: And, because the majority were of the view that the Act was wholly valid, he did not have to ‑ ‑ ‑
MR GRAHAM: Yes, he did not have to do that. Would your Honour be good enough to look on page 2 of the document I have just handed to you. Paragraph 1(c) contains a claim for a declaration that the determination of the board, which is the one I have just taken your Honour to, was invalid. So that was one of the matters in issue before the Federal Court and of course would be one of the matters we would wish to agitate if we were successful in our special leave application.
We reiterate that challenge to the determination in the summons in the proceedings issued in this Court that is raised in paragraph 54 of the statement of claim. A claim for a declaration of invalidity of the determination is to be found in paragraph A(b) of the prayer for relief. We say that there are live and difficult arguments as to the question whether the Act and whether the determination and perhaps even, if it matters, the summonses are severable or can be read down in some way, but we say that certainly the determination falls in toto and we say the summonses must therefore fall as well.
HIS HONOUR: Were section 78B notices given in the Federal Court?
MR GRAHAM: Yes, they were, your Honour.
HIS HONOUR: What was the response to those notices?
MR GRAHAM: My learned friend the Solicitor for the Commonwealth came and presented the principal argument on behalf of the respondent.
HIS HONOUR: And nobody turned up for the States?
MR GRAHAM: No. The judgment of the Full Federal Court to which I wish to make just passing reference is to be found in Mr Rydon’s open affidavit. The judgments of their Honours is under tab 7. I only need to refer to a short passage in the judgment of Justice Gyles which your Honour will find at paragraph [74]. If I can read part of that:
The consequence is that the ACC Act has an operation going beyond Commonwealth legislative power and, to that extent at least, is invalid. It is well entrenched that the ACC Act should be read down so as to operate validly within the area of Commonwealth power where that is possible (Acts Interpretation Act 1901 (Cth), s 15A; Hughes at [43]). All of the ramifications of reading down were not fully explored in argument. It does not seem that a process of reading down could save the validity of operation of the ACC Act proposed by the ACC in the cases in issue in these proceedings. Indeed, there were no detailed submissions addressed to the point on behalf of the respondents. Because of the need to translate a finding of invalidity into precise relief in the various proceedings, I would order that the parties in each proceeding bring in draft short minutes of order for that purpose.
Of course, that was not necessary because he was in the minority.
Inherent in what I have just been putting to your Honour is that we say that the determination of the ACC is invalid and is not severable by removing references to State offences with federal aspects and going on with the rest. That takes me to the suggestion that fell from your Honour as to some way of limiting the scope of summonses, either the second batch of summonses that have been issued, subject to an undertaking, or by the issue of fresh summonses making no reference to State offences with a federal aspect.
HIS HONOUR: I still have not had an opportunity to ask Mr Donaghue what is the point of issuing further summonses.
MR GRAHAM: I am in your Honour’s hands whether that happens now or later.
HIS HONOUR: You go ahead and say whatever you want to say, Mr Graham, and I will ask him in due course.
MR GRAHAM: So far my learned junior and I have not discovered what the reason was except some suggestion that passed between the solicitors on either side that they were thought possibly to be stale. What that meant we do not know. There is this problem that arises from the suggestion of some kind of limitation on the scope of the summons. May I ask your Honour to go to section 28 of the Australian Crime Commission Act. I think that was in the respondent’s book of authorities. If the pagination is the same in your Honour’s copy as mine, it is at page 43. The important provision from our point of view is to be found in subsection (3) which I think I must read in full:
A summons under subsection (1) requiring a person to appear before an examiner at an examination shall, unless the examiner issuing the summons is satisfied that, in the particular circumstances of the special ACC operation/investigation to which the examination relates, it would prejudice the effectiveness of the special ACC operation/investigation for the summons to do so, set out, so far as is reasonably practicable, the general nature of the matters in relation to which the examiner intends to question the person, but nothing in this subsection prevents the examiner from questioning the person in relation to any matter that relates to a special ACC operation/investigation.
So the omission of a reference to State offences having a federal aspect in the summons would not confine the examiner. I should just add a reference also while your Honour has that page ‑ ‑ ‑
HIS HONOUR: I suppose the examiner is not a party to these proceedings.
MR GRAHAM: Except insofar as he is a member of the ACC. If there was a need to join him, I expect it could be done, but an injunction restraining the Commission and its employees and agents would probably go far enough anyway.
HIS HONOUR: No, I was thinking of the opposite. I was thinking of an undertaking given by the examiner. There is nobody here appearing for the examiner, I take it?
MR GRAHAM: No.
HIS HONOUR: I understand that point, Mr Graham.
MR GRAHAM: I think there is nothing that I need to add in that regard. If I can just add this. We would say that given what your Honour the Chief Justice was good enough to say this morning concerning a date for the special leave application, we find it hard to see how the delay that would be entailed in having this matter dealt with by way of the appeal which we are seeking to institute in this Court against the Full Federal Court’s decision would not be greatly significant even, and I hesitate to say so, having regard to the burden this Court faces in May in the Industrial Relations Cases. Given the time that has elapsed since the determination was first made and the date when this Court finally disposed of this matter, it is hard to see that there is any real element of urgency.
HIS HONOUR: I will be sitting here in the special leave applications on 19 May.
MR GRAHAM: All we can say is that what appears in the last paragraph of Mr Duffy’s affidavit concerning the effect and suggested purpose of these proceedings ‑ ‑ ‑
HIS HONOUR: I am sorry, I just have to remind myself of that now.
MR GRAHAM: Yes, I wanted to remind your Honour of it:
One of the functions of the ACC is to investigate serious and organised criminal activity. Often the individuals who engage in serious and organised crime have significant wealth. They therefore have the capacity to seek to inhibit the investigation of their criminal activities by commencing court proceedings. They are of course entitled to do so. However, such proceedings have at least a side effect (if not a primary purpose) of causing delay to ACC investigations. If the ACC is unable to conduct investigations until the targets of investigations have exhausted their appellate rights all the way to the High Court of Australia, that will create a significant incentive for the targets of ACC investigation to pursue litigation. The utility of ACC investigations such as Operation Wickenby –
which is this case –
would be disrupted and undermined in the very cases that most require investigation by that body.
We would say, your Honour, that was an entirely unnecessary and unpersuasive statement to place before this Court. If the Court pleases.
HIS HONOUR: Yes, Mr Donaghue. Why were the second set of summonses issued if they are identical to the first set?
MR DONAGHUE: Your Honour, because all of the first set required people to attend for examination in July, August and September I think of last year, so on their face it was not possible for somebody to comply with those summonses. It follows from that that if those summonses were to be the operative instruments they would have needed to be varied in order to change the examination date. We contend that the ACC does have the power to vary those summonses because they are instruments and 33(3) of the Acts Interpretation Act applies, but there is a challenge to the ACC’s exercise of that power and it seemed unwise to invite another challenge, entertain that when that could be avoided by issuing new summonses in identical terms.
HIS HONOUR: I understand that perfectly. That means that for all practical purposes there is no relevant difference between the original set of summonses and the present set of summonses. The present set of summonses were only issued to avoid a possible technical problem.
MR DONAGHUE: That is exactly right. We say for that reason – your Honour, perhaps I can hand up a written outline. We say that it was never our intention in issuing the new summonses to in any way undermine the process by which the special leave application would come to this Court and the Court could consider whether or not a stay should be granted pending special leave. We say that that as a matter of substance is the application that is before the Court, notwithstanding that there has been a completely identical application filed in the original jurisdiction of the Court.
HIS HONOUR: The question that occurs to me then is this. Since we are going to be dealing with the application for special leave to appeal on 19 May and since it appears to be conceded that if that application is unsuccessful that will bring an end to these challenges to the summonses, why should I not just stand this matter over until 19 May and, if necessary, give the injunctive relief which, as you say, is in effect a stay pending that?
MR DONAGHUE: Because, your Honour, that jurisdiction only arises in particular cases, one of which is where it is necessary in order to preserve the subject matter of the litigation.
HIS HONOUR: As it plainly is because the subject matter of the litigation here is the capacity of the ACC to examine the present applicants.
MR DONAGHUE: That, your Honour, is one way of characterising it.
HIS HONOUR: If they are examined in the meantime, that is the end of the subject matter of the litigation, is it not?
MR DONAGHUE: Their challenge in its terms is a challenge to the validity of the Act and the determinations. That of course could be heard whether or not they have been examined and if they win, it would follow as a consequence that any evidence obtained from them was unlawfully obtained and that has consequences that it may or may not have down the track. So in terms of the relief that they seek, it is not the case that they would be shut out entirely were the examinations to proceed. There would still be utility from their perspective in pursuing the case and it would still be, if they were to succeed ultimately, possible for them to at least a very great extent protect themselves from any consequences of the examination taking place. So that is one answer. The other answer we give ‑ ‑ ‑
GLEESON CJ: Just a minute. If they are right in their argument, the ACC has no power to ask them questions and no business to do so. They may be wrong about that, but if they are right about that, then the ACC cannot compel them and cannot ask them questions, or it can only ask them questions in the sense that I could ask them questions or you could ask them questions.
MR DONAGHUE: It will not be an offence to ‑ ‑ ‑
HIS HONOUR: Anybody could ask anybody a question. As to whether you get an answer, good luck. But why is not the subject matter of the proceedings properly to be understood in that light?
MR DONAGHUE: We accept that it can be characterised in this way subject to one qualification ‑ ‑ ‑
HIS HONOUR: Suppose we give special leave to appeal and suppose the Court upholds the decision of Justice Gyles and in the meantime these people have been unlawfully compelled to attend for examination before the ACC. What are the consequences of that?
MR DONAGHUE: On that hypothesis, any answers that they have been compelled to give would almost certainly be held to have been given involuntarily or to have been illegally obtained and therefore to be inadmissible against them at a criminal trial.
HIS HONOUR: And the information that the ACC has obtained?
MR DONAGHUE: At the very least one would imagine it would be susceptible to discretionary exclusion under the Bunning v Cross or section 138 of the Evidence Act discretions.
HIS HONOUR: But you could not undo the fact that they had turned up and been examined.
MR DONAGHUE: No, that is true, but they have turned up and been examined only after the arguments that they seek to make have been fully articulated before the Federal Court and rejected.
HIS HONOUR: Mr Donaghue, the determination was made on 13 May 2003. The first summons was issued on 12 July 2005. It is now March 2006. There is a hearing date of 19 May 2006 for the special leave application. There is no suggestion of any delay at any stage on the part of the present applicants. What are we trying to achieve by producing this interim situation that you have just described instead of standing this matter over to 19 May?
MR DONAGHUE: Your Honour, can I start my answer to that question by saying that the date of the determination, which is the date that is a long time ago, has nothing whatsoever to do with the investigation of the applicants. A determination is not an investigation specific matter. It is an umbrella decision by the board of the ACC that we are interested in a particular area: money laundering and tax fraud, people smuggling, organised criminal gangs. So there are umbrella references of that kind and underneath each of those determinations specific investigations start. Operation Wickenby is such a specific investigation which commenced not – there are a series of investigations under the determination. So it does not follow that there is no urgency simply because ‑ ‑ ‑
HIS HONOUR: What harm is there in keeping this matter in statu quo between now and 19 May?
MR DONAGHUE: The only harm is that the investigation is, in our submission – and I do need to develop this answer – delayed without justification.
HIS HONOUR: But what is the harm involved in that? That is what I want to understand.
MR DONAGHUE: The difficulty really arises in the paragraph that my learned friend said was inappropriate, that looking at this matter in isolation separately from all other matters, it is difficult to point to the harm in disrupting an investigation.
HIS HONOUR: Shall we go to that paragraph?
MR DONAGHUE: Yes, your Honour. This case is just ‑ ‑ ‑
HIS HONOUR: I would like to understand a little better than I do at the moment the point that is being made in that paragraph.
MR DONAGHUE: The point, your Honour, is this. It is, particularly in the last 18 months or so, very common for Federal Court proceedings to be commenced challenging various different types of actions of the ACC and it is very common once those proceedings are commenced for the ACC to be asked to give undertakings that it will not do anything until those cases come on for hearing and determination. That sometimes takes a considerable period of time and during that time the investigations that are taking place have to stop and any subsequent steps that would be dependent upon those examinations taking place also have to stop.
When that happens on a systematic and regular basis, the investigative activities of the ACC are seriously impaired in circumstances where almost invariably – I think there may be two or three cases in the 20‑odd years that the National Crime Authority and the ACC have existed where ultimately they have lost the cases.
HIS HONOUR: That is the significance of the fact that we have a dissenting judgment from Justice Gyles in the Full Court. I have to tell you that I have not had an opportunity to apply my mind to the rights and wrongs as between the majority and the minority in the Full Court of the Federal Court, but it looks as though there is an arguable case.
MR DONAGHUE: There is an arguable case ‑ ‑ ‑
HIS HONOUR: But bearing that in mind, I would like you to continue your exposition of this paragraph.
MR DONAGHUE: Well, your Honour, the point is it is not to say that it is improper in any way to challenge the ACC’s exercise of powers.
HIS HONOUR: How could it possibly be improper for anybody to exercise their legal right?
MR DONAGHUE: Well, of course not, your Honour, and it is not suggested that it is, but where the rights have been exercised and the challenge that has been mounted has been held not to be well founded, it does not necessarily follow that while appellate rights are pursued, perhaps over a period of years ‑ ‑ ‑
HIS HONOUR: We are talking about a period of two months.
MR DONAGHUE: Well, we are talking about a period of two months until the special leave hearing.
HIS HONOUR: Yes, the matter can be reconsidered then if special leave to appeal is obtained. If special leave to appeal is refused, as I understand Mr Graham, everybody agrees that is the end of the matter.
MR DONAGHUE: Yes, but the problem as we see it, your Honour, is really the problem that your Honour put your finger on right at the beginning of the proceedings, which is that given that we have said, “You will only be examined in relation to Commonwealth offences”, it seems to us, with respect to the applicants/plaintiffs, that even if they are completely right in the arguments that they make, it is plain that the relevant provisions will be severable, and Justice Gyles did not find to the contrary.
HIS HONOUR: I do not get that. One of the arguments they make is that the entire Act is invalid.
MR DONAGHUE: That argument depends completely upon the federal aspect attack succeeding and the Court then finding that that phrase and that associated concept cannot be severed from the Act. We submit that it is plain that it can be and that they bear the onus, as a result of section 15A of the Acts Interpretation Act, of showing that it cannot be and that there is no realistic prospect that the Court would hold that a Commonwealth body cannot exercise coercive powers to investigate Commonwealth offences.
Given that that is what we say is the only thing we want to do, if this matter is delayed until a special leave hearing and special leave is then granted, it does not seem unlikely that the stay would be – the position of the applicants at that point is stronger. They have got special leave, so if there is a proper basis for a stay until then, there is probably a proper basis for a stay until hearing and determination. At the end of all that, you still have the Crime Commission saying, “Why can’t we investigate the Commonwealth offences? They are the only things that we want to investigate in circumstances where your only attack on this Act relates to the parts of it that are concerned with State offending.”
HIS HONOUR: But that is not correct. It is not correct that their only attack on the Act relates to the parts of it that are concerned with State offending.
MR DONAGHUE: If that attack fails, the whole case fails. I do not believe there would be any dispute about that. If the federal aspect definition is upheld, there is no suggestion the Act is invalid. If the federal aspect definition is not upheld – your Honour, can I take you back to section 4 of the ACC Act and the definition of “federally relevant criminal activity”? That phrase is the operative phrase that is used throughout the remainder of the Act. So if that phrase is capable of being read in a way that is read down or having parts of it severed so that it only applies to Commonwealth offences, then the whole Act will operate in exactly the same way that it operates now except that the ACC will only be able to investigate Commonwealth matters, not Commonwealth and State matters.
Now, your Honour, if you put a blue pencil through (b)(ii), their case is gone. There is no remaining basis for saying that the ACC is not entitled to investigate Commonwealth offences using its coercive powers, and that is all it seeks to do. So we submit that the 4A question and the Hughes related issues are issues of a kind that where there is an appropriate vehicle might well warrant a grant of special leave. That raises at least a possibility that the Court will on 19 May grant special leave. But if that happens, then the consequence of a stay today is likely to follow through to a delay of upwards of 12 months in all likelihood in circumstances where there is not, in our submission, any credible argument that would prevent the ACC from doing the only thing that it said that it wants to do, that is, investigate federal offences.
HIS HONOUR: If the only thing you want to do is investigate federal offences, why do the summons contain that reference to State offences?
MR DONAGHUE: Because they were repeated in identical terms. We are happy to issue a new summons. We are happy to vary the existing summons in order to remove those words. We are happy to ‑ ‑ ‑
HIS HONOUR: Maybe that is something you can do between now and 19 May.
MR DONAGHUE: Well, the problem is ‑ ‑ ‑
HIS HONOUR: If you want the Court to deal with this matter on the basis that the only questioning will relate to federal offences, why should it be left on the basis of an indication of intention in circumstances where there is in the Act a provision that – I think it is section 29(3) that Mr Graham has already referred to ‑ ‑ ‑
MR DONAGHUE: I thought 28(3), your Honour.
HIS HONOUR: Section 28(3), is it?
MR DONAGHUE: The difficulty is that even an amendment to the summons would not prevent 28(3) from operating more widely and the reason that we are not sure that a new summons or a variation helps us is that, as we understand it, Mr Graham says that does not answer their concern. So if we issue a new summons, there will just be a new proceeding presumably instituted challenging that summons.
HIS HONOUR: It does have this effect, I would have thought, that if the summons were limited in terms to federal offences, then that would deprive Mr Graham of an argument that there is a substantial basis for an apprehension that reliance will be placed on section 28(3) to go beyond federal offences.
MR DONAGHUE: If a new summons is issued in those terms – your Honour, I think I need to separate two propositions. There is the summons that is the subject of the Federal Court proceedings. Unless we go back and deal with that summons, then Mr Graham will be able to make the argument he wants to make and the argument he made in the Federal Court on his special leave application, because that is the summons that is the subject of that application. The question, as we apprehend it, before the Court today is whether starting on Monday and following over the next week and a half or so, pursuant to the new identical summonses, we can go ahead with the conduct of our investigation only touching upon federal offences.
We do not apprehend that that would cut the plaintiffs out from making their application on special leave and raising the constitutional issues that they seek to raise there. But we do say, your Honour, that – and I do not need to take your Honour to them, but all of the authorities say that the jurisdiction being invoked today is an exceptional jurisdiction only to be utilised in extraordinary circumstances and that unless your Honour were of the view that the plaintiffs have a very strong argument on their severance point, a very strong argument that the federal aspect definition cannot be severed from this Act, that there is not any basis for saying to the ACC two months, or maybe 12 months, or more if special leave is granted, an investigation into Commonwealth offences cannot proceed.
As your Honour noted from the summons, there are a number of federal offences listed. If your Honour goes back to the determination, which I think started on page 20 of Mr Rydon’s second affidavit. If your Honour turns to page 23, line 10, you can see the allegations that the ACC is authorised to investigate under this determination. They go on for over two pages and every single one of them, except for the last paragraph, is an offence against Commonwealth law.
When the Board of the ACC authorised this umbrella investigation, they are listing money laundering under the Proceeds of Crime Act, dealing with money and property contrary to various provisions of the Criminal Code, unlawful activities relating to financial transactions contrary to the Proceeds of Crime Act – and the list goes on – financial advantage by deception contrary to the Criminal Code (Cth). All of these matters are criminal offences. Then I would draw your Honour’s attention to the paragraph on page 25, lines 5 to 8.
Now, again we say it is plain, looking at this document as a whole, that it is primarily a document authorising the ACC to conduct investigations into Commonwealth criminal activity. If the applicants are right in everything they say, you blue pencil paragraph (j) and there is no possible basis for contending that this determination is invalid. So we have a situation where (1) the majority of the Federal Court have rejected the argument, but we accept there is a division of opinion, but (2) even if the argument is good, unless you get over the severance hurdle – and even Justice Gyles thought that there was an issue there, but he did not need to determine that – the ACC is entitled to conduct the investigation.
We submit, your Honour, that on the Jennings v Burgundy Royale type criteria, unless your Honour is satisfied that this is a truly extraordinary case, it is not just a matter of balance of convenience between the parties, we are entitled to take the benefit of the judgment of the Full Federal Court. As I think Justice McHugh said in one of the authorities, a decision of a lower court is not a provisional decision depending on confirmation in an appellate court. It determines the rights of the parties. That is really the basis upon which we say were are entitled to proceed. If the Court pleases.
HIS HONOUR: Mr Graham.
MR GRAHAM: Your Honour, nothing that my learned friend has said in response to our submissions gets over the fact that our attack includes the attack on the determination as a whole. If the determination as a whole is bad, the summonses, past, present and future, will be bad whether they are confined to federal offences or not. That is our starting point. Unless my learned friend can persuade your Honour that the determination is demonstrably severable or can be sustained in some way, then, we submit, we should have an injunction.
Your Honour, my learned friend raised the Burgundy Royale line of authority. We say that the relevant authority in this Court, first in our list of authorities, is Colonial Sugar Refining Co Ltd v Attorney-General (1912) 15 CLR 182 at 193 where Chief Justice Griffith said:
In my opinion the jurisdiction of the Court both to make a declaration of right and to grant an injunction is clearly established in any of the following cases: (1) If the Act itself under which the alleged power is claimed is wholly invalid; (2) If the Government instrumentality is attempting to exert under cover of a valid Act powers which are not capable of being conferred on it by the Commonwealth Parliament; or (3) If it is attempting to exert under cover of the instrument creating it, powers which that instrument does not confer.
We submit that is the principle that applies when one is seeking an injunction in the course of constitutional litigation instituted in the original jurisdiction of this Court. It is a passage that was preceded by a remarkable passage in which his Honour was moved to say that if the Court did not intervene to prevent unlawful action by the court and could not protect a plaintiff, he went on to say it is:
As well tell a man who is threatened with the bastinado that he must wait and bring his action for damages after the disciplinary power has been exercised.
If your Honour pleases.
HIS HONOUR: This matter has come before the Court as a matter of urgency in circumstances which include the following. On 13 May 2003 there was a determination by the Australian Crime Commission made under the provisions of the Australian Crime Commission Act 2002. In July and August 2005 summonses were issued for the examination under that Act of the plaintiffs.
In August 2005 the plaintiffs commenced proceedings in the Federal Court of Australia challenging the validity of the entire Act and/or various provisions of the Act, challenging the validity of the determination, and challenging the validity of the summonses. By agreement between the parties it was arranged that the plaintiffs would not be required to answer the summonses until after the resolution of the proceedings in the Federal Court. The proceedings in the Federal Court were dealt with by the Full Court of the Federal Court without any previous decision or determination by a single judge of that court. On 15 February 2006 the Full Court of the Federal Court by majority, with Justice Gyles dissenting, upheld the validity of the Act and the determination and the summonses.
In February 2006 the plaintiffs filed an application for special leave to appeal to this Court. That application for special leave to appeal has now been set down for hearing on 19 May 2006. On 27 and 28 February further summonses in the same form, subject to one technical qualification, were issued against the plaintiffs. It was explained to me that the reason for the issue of the fresh summonses was that there was an apprehension that the original summonses had become or would become stale. It was not intended that there would be any substantial difference between the new summonses and the summonses that were the subject of the proceedings before the Full Court of the Federal Court.
The plaintiffs have now commenced proceedings in this Court seeking injunctive relief against the Australian Crime Commission which, unless restrained by the Court, intends to examine the plaintiffs pursuant to the new summonses over the next week or so.
I propose to deal with the present application on the basis that the question is one of maintaining the status quo until 19 May 2006. There are a number of reasons for that. First, no section 78B notices have been issued in relation to the proceedings instituted in this Court, although I was informed that 78B notices were issued in relation to the proceedings in the Federal Court. In that respect, I note the provisions of section 78B(5). Even so, I have to deal with this matter today in the absence of any relevant 78B notices and in the absence of any appearance on behalf of any potential recipient of such a notice.
Secondly, it is acknowledged in argument by senior counsel for the plaintiffs that if the application for special leave to appeal is unsuccessful on 19 May 2006 that will be the end of these proceedings and there will be no basis for any further challenge to the summonses in question. Thirdly, the urgency with which the matter has had to be resolved has meant that there is only limited opportunity to consider fully the merits of the issue between the parties. A reading of the reasons for judgment of the members of the Full Court of the Federal Court indicates that there is a serious question to be considered.
Next, there is nothing before me to indicate any particular harm or disadvantage that will be suffered by the Australian Crime Commission if the possible examination of the plaintiffs pursuant to the summonses is delayed for the period between today and 19 May. In that respect, I refer to paragraph 16 of the affidavit of James Edgar Duffy sworn 9 March 2006, which I assume contains the most that can be said on behalf of the Australian Crime Commission in support of the suggestion that there would be any harm resulting from such delay.
If, between now and 19 May 2006, the plaintiffs are examined under the compulsion purportedly effected by the summonses whose validity is in question, then in a real and substantial sense the subject matter of the litigation will have disappeared. The entire purpose of the proceedings is to challenge the compulsive effect of the summonses in question in circumstances where it is clear that the plaintiffs are unwilling to be examined voluntarily.
The proceedings in the Federal Court were brought for the purpose of determining the existence of such legal compulsion. There is no suggestion that in any respect the plaintiffs have been dilatory in pursuing their legal rights. On the contrary, the chronology that has been handed up to me shows that there has been no delay of any kind on the part of the plaintiffs.
In all those circumstances it seems to me appropriate to preserve the status quo until 19 May 2006 when this Court will have an opportunity in the application for special leave to consider the merits of the legal issues between the parties. In that respect I should mention that, as at present advised, it appears to me that even if the plaintiffs succeed in raising doubt as to the validity of the legislation insofar as it deals with investigations of offences against State law – and I express no opinion one way or the other on that matter – there is a substantial question of severability that will have to be faced up to by the plaintiffs.
Counsel for the Australian Crime Commission has pointed out in the course of argument that an examination of the determination and the summonses indicates that for all practical purposes, or almost all practical purposes, the concern of the Commission appears to be in the investigation of federal offences. It may be that the references to State offences were added only for an abundance of caution.
Senior counsel for the plaintiffs, on the other hand, has drawn attention to the provisions of section 28(3) of the Act. Reference has also been made in the course of argument to the possibility of the issue of fresh summonses limited in terms to federal offences. What, if any, impact considerations of that kind might have upon what will occur on 19 May 2006 is something upon which it would presently be unproductive to speculate.
Where do I find the relief that you seek, Mr Graham?
MR GRAHAM: Your Honour, in the summons filed in the matter presently before the Court, S65 of 2006, paragraph 1, which I would anticipate if your Honour were to grant injunctions in the form of paragraphs (a), (b), (c), (d) and (e), the opening words of paragraph 1 would be confined “until the hearing and determination of the” – I am sorry, I may have got ahead of your Honour.
HIS HONOUR: Just a moment.
MR GRAHAM: It is only a three‑page document, your Honour.
HIS HONOUR: I have a writ of summons, S65 of 2006.
MR GRAHAM: Your Honour should have a document with a heading and just the word “SUMMONS” with relief appearing on page 2.
HIS HONOUR: Yes.
MR GRAHAM: I was going to propose, your Honour, in the light of your Honour’s reasons, that the opening words would read “An injunction restraining the Defendant . . . until the hearing and determination of the application for special leave to appeal by the plaintiffs in proceeding No S63 of 2006”.
HIS HONOUR: What I am minded to do is change those words to say “An injunction restraining the Defendant . . . until 4.30 pm on 19 May 2006”.
MR GRAHAM: We are content with that, your Honour.
HIS HONOUR: That means that if for some reason the special leave application does not go ahead on that day the matter will have to be reconsidered.
MR GRAHAM: Yes.
HIS HONOUR: Mr Donaghue, having regard to the reasons I have just stated, is there any reason why I should not make those orders in that form with that time limit that I suggested?
MR DONAGHUE: There is not, your Honour, no.
HIS HONOUR: Very well. I will make orders in terms of paragraphs 1, 2, 3, 4, 5, 6, 7 and 8 of the summons filed on 9 March 2006 altering the words “until the hearing and determination of this proceeding or further order” to “until 4.30 pm on 19 May 2006”. This is accompanied by the usual undertaking as to damages, I presume.
MR GRAHAM: It is, your Honour.
HIS HONOUR: I note that the plaintiffs give the usual undertaking as to damages.
MR GRAHAM: Yes, I was disposed to argue, your Honour, that it is hard to see how they could be undertaking to be called on, but it is perhaps best just to give it and leave it at that.
HIS HONOUR: For all I know there will be costs and expense incurred in postponing these examinations.
MR GRAHAM: Yes, I have those instructions, your Honour.
MR DONAGHUE: There is one other procedural matter. As your Honour might have noted, in the Full Court there were a series of proceedings, two appeals, I think, and three first instance proceedings referred into the Full Court. The application for special leave that has come here today is one of those proceedings. I am instructed that in the other four proceedings applications for special leave have also been filed and it would seem desirable if all of them are listed to be heard together on 19 May.
HIS HONOUR: Yes, I will make that order.
MR DONAGHUE: Does your Honour want the proceeding numbers for those matters or should we ‑ ‑ ‑
HIS HONOUR: The Deputy Registrar is in Court. She knows what I am talking about. All those matters will be listed on the same day together.
MR DONAGHUE: If the Court pleases.
MR GRAHAM: Your Honour, may I express the gratitude of the parties for your Honour hearing this matter urgently on a Friday afternoon.
HIS HONOUR: Now, what about the ugly question of costs? Does that arise?
MR GRAHAM: It seems appropriate that the costs be reserved, your Honour, or otherwise be costs in the cause.
HIS HONOUR: Costs in the cause, I should think. Are you happy with that?
MR DONAGHUE: I am, your Honour, yes.
HIS HONOUR: The costs of today’s proceedings will be costs in the cause.
MR GRAHAM: If the Court pleases.
HIS HONOUR: The Court will adjourn.
AT 3.06 PM THE MATTER WAS CONCLUDED
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